Editore"s Note
Tilting at Windmills

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September 14, 2010

HOW TO LOSE AFTER BEING DEALT A GOOD HAND.... The high-profile fight of the moment is over tax policy, and by most measures, Democrats are in a reasonably good position. Republican leaders are arguing amongst themselves; polls show President Obama's proposal to be considerably more popular than the GOP's; and just weeks before the midterm elections, Republicans are prepared to fight tooth and nail to hold middle-class tax cuts hostage.

It's not a bad scenario for Democrats, right? The only way for Dems to screw this one up would be for them to start breaking ranks and siding with Republicans on the minority party's misguided, unpopular, and irresponsible plan, and start echoing bogus GOP talking points.

And wouldn't you know it....

[Independent Sen. Joe Lieberman of Connecticut] called on Monday for extending the cuts at all income levels, for a year. "I don't think it makes sense to raise any federal taxes during the uncertain economy we are struggling through," Mr. Lieberman said in a speech to the Chamber of Commerce in Middlesex, Conn. [...]

At the Capitol later in the day, Mr. Lieberman said he would not block a bill that continued the tax breaks only at the lower levels.

But Senator Ben Nelson, Democrat of Nebraska, refused to make a similar commitment, saying he did not expect his party leaders to force a vote only on Mr. Obama's preferred plan. But he said he would not vote for a bill that included only a partial extension. "It would be very hard for me to support that," he said.

For nearly two years, senators like Lieberman and Ben Nelson demanded that nearly everything on the Democratic agenda -- from health care to energy to extended unemployment benefits -- had to be fully paid for. The American people, they said, demanded fiscal responsibility. But the moment Republicans ask for $700 billion in tax breaks for the wealthy, all of which would be added to the deficit, there's Lieberman and Ben Nelson, insisting that fiscal responsibility no longer matters.

More importantly, they're just wrong about the efficacy of the policy.

[L]etting people who already have plenty of money keep a little bit more of it doesn't boost demand in any meaningful way. The wealthy will save, rather than spend, that money. The deficit will be bigger and demand won't be any higher.

This is why the CBO rated tax cuts for the wealthy as the least-helpful of 11 forms of economic stimulus they evaluated. This is why former McCain adviser Mark Zandi of Moody's estimated that making the Bush tax cuts permanent would return a mere 29 cents of economic growth for each dollar the government spent on the tax breaks. This is why Bloomberg wrote this today: "Hand the wealthiest Americans a tax cut and history suggests they will save the money rather than spend it."

Despite all of this, Republicans are prepared to hold middle-class tax breaks hostage -- and Ben Nelson is inclined to help them, while Joe Lieberman repeats their talking points.

Steve Benen 8:30 AM Permalink | Trackbacks | Comments (33)

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Comments

Reid should go for the filibuster: it makes for good political theater. Even if the Dems lose, it would at least show they had some backbone.

However, I do have faith that Obama et al. will find a way to misplay this and fold.

Posted by: sjw on September 14, 2010 at 8:33 AM | PERMALINK

At least Obama didn't go to the matt to support Lieberman's re-election campaign against Lamont. Oh wait...

On a related note, I'm looking forward to Blanche Lincoln's position on this.

Posted by: tommybones on September 14, 2010 at 8:38 AM | PERMALINK

How long after Obama and the Dems fold on this before the GOP starts using the hundreds of billions the tax cuts for the wealthy add to the deficit against them? My guess? 5 minutes later.

Posted by: Tommybones on September 14, 2010 at 8:40 AM | PERMALINK

Nelson is about as useful to the Democrats as mammaries on a male bovine.

Posted by: c u n d gulag on September 14, 2010 at 8:40 AM | PERMALINK

I know this'll probably get scrubbed, but really, all I can say is: fuck fuckity fuck.

:slams head against desk a few dozen times:

Posted by: low-tech cyclist on September 14, 2010 at 8:45 AM | PERMALINK

There goes Obama and his 11D chess...

But seriously, it will be funny when the Democrats snatch this thing from the jaws of defeat, and the nay-sayers throw their hopes and dreams onto Obama and fall in love all over again.

In the end, it will be what it always was: a shrewd, centrist Democratic president who let his opponents overplay their hand, and then "came from behind" to win. People always forget the Muhammad Ali poster.

Posted by: John S. on September 14, 2010 at 8:47 AM | PERMALINK

Nelson is absolutely right! Deficits DO matter! And that's why tax cuts for the wealthy should be paid for with spending cuts- in the Agriculture Bill. . .

Posted by: DAY on September 14, 2010 at 8:50 AM | PERMALINK

On a less vulgar note, this is why the Dems need some mechanisms for party discipline.

As long as Nelson, Lieberman, and a bunch of House Business Dog Dems can screw up the party's message without experiencing any consequences, THEY'LL KEEP ON DOING IT.

I don't want the Dems to demand lockstep unanimity on everything. But dammit, there are some issues where either there's only one reasonable side for a Democrat to be on, or there's no particular reason for people to believe they can count on Democrats to be on their side.

Welcome to Enthusiasm Crater.

Posted by: low-tech cyclist on September 14, 2010 at 8:50 AM | PERMALINK

Let us all write to some of our elected reps and tell them not to cave on this!

Posted by: js on September 14, 2010 at 8:50 AM | PERMALINK

Will all due respect. I dont see any democrats in that post. Sure, sure, I see Nelson and Holy Joe, but they are not needed for the game to play out.

You hold the vote in the House. You get the right bill to the Senate and you get every GOP senator voting against the middle class tax cuts. Who cares if Lieberman and Nelson vote to kill the bill. You still get 50+ and you win the narrative.

Until I see Pelosi and Reid fold, then this is all premature hand wringing.

One thing is clear though: you cant blame Obama for any error here. He led the horse to water; if there is no drinking it falls squarely on the congressional leadership and its fealty to the monied class.

eric

Posted by: eric on September 14, 2010 at 8:51 AM | PERMALINK

I wonder if Nelson and Lieberman realize that if the Democrats lose a some seats in the Senate, but fewer than seven, then they will have very little power to hold the Democrats' agenda hostage.

But then, I doubt the Reid or Obama will act like they know this either.


Posted by: SteveT on September 14, 2010 at 8:52 AM | PERMALINK

When will someone of the talking heads class make the point simple so us unsophisticated can understand these here politics:

The rich bastards haven't been paying their fair share, so the Bush tax cuts will expire on them!

The middle class has been paying just right, so our Congress should take up legislation that will extend the Bush tax rates!

The question the media should be asking is which Bush will the Republicans hide behind?! -Kevo

Posted by: kevo on September 14, 2010 at 8:59 AM | PERMALINK

Lieberman - NOT A DEMOCRAT
Nelson - NOT A HUMAN

Posted by: Vandal on September 14, 2010 at 9:00 AM | PERMALINK

The Democrats are simply not a political party. Remember the leadership supports these asshats. There is no downside for them fucking things up. Everyone in the caucus has his own conscience. You can make your own decisions. But if you fuck the party, you don't get play with a gavel. That is fundamental. If you exercise that conscience to the detriment of the party, life becomes more difficult. Why is this such a foreign concept to Democrats?

Posted by: SW on September 14, 2010 at 9:06 AM | PERMALINK

Chicken or egg question.

1. Do the Democrats decline to talk about how GOP policies increase the deficit and debt b/c the media refuses to acknowledge it?

2. Does the media rarely discuss how GOP policies increase the deficit and debt b/c Democrats don't raise the point forcefully?

Democrats should clearly state that the Democratic bill is the one that's going to receive a vote. The Republican option will be allowed as an amendment.

If the Republicans don't allow this then the Bush tax law stands.

Posted by: Carl Nyberg on September 14, 2010 at 9:12 AM | PERMALINK

LET'S see a few poll results about how the public feels about giving those 110,000 people an extra $45,000 a year.

Poll question:

Would rather have The Federal Government spend $45,000 on behalf of country or Paris Hilton?

Ergo, let's change the face of the rich from the business man to the flamboyantly decadent heiress or heir.

YES, watch Senator McConnell defend their tax cuts so peole can buy $10,000 Swiss watches from clerks making barely above minimum wage.
.
.
.
.
meanwhile

Boycott The Wall Street Journal

Posted by: KurtRex1453 on September 14, 2010 at 9:14 AM | PERMALINK

Well, Lieberman's not a Democrat (and another big fat THANK YOU to Obama, Boxer, and the various Dems who supported him over an actual Democrat), but thank heavens he's with us on everything that doesn't matter.

Posted by: Fleas correct the era on September 14, 2010 at 9:20 AM | PERMALINK

"I don't think it makes sense to raise any federal taxes during the uncertain economy we are struggling through,..."

Who the hell is this "we" Joe Lieberman is talking about? Last I checked, the rich are indeed still getting richer. The Republicans' goal is to link all taxes together — upper, middle and lower class — as if tax cuts in each class would have the same effect. "Cut a poor man's taxes and 'lo and behold' he's rich!"

Right now I'm struggling to pay a perfectly reasonable mortgage. I've cut my monthly expenditures to the bone. My wife treats coupons like they are cash. We don't eat out or go to the movies at all. We've bought no new clothes in over a year. Had no vacation this summer and our child missed two camps. And I bought a box of 30 cans of Genesee beer the other night because it was $11.99.

I wonder what struggles Joe Lieberman is dealing with right now?

"We?" "We" my ass!

Posted by: chrenson on September 14, 2010 at 9:22 AM | PERMALINK

I think it is a little premature to say that Democrats are screwing this one up. Neither Lieberman or Nelson are Democrats in any real sense of the word.

What the Senate leadership needs to do is to put a middle class only tax break up for a vote, and then force the Republicans to do a real filibuster (i.e. stay on the Senate floor speaking all night). If the filibuster is broken, then we can claim victory; if not, we need to make Republicans filibustering middle class tax relief a centerpiece of this election season.

Winning Progressive
www.winningprogressive.org

Posted by: Winning Progressive on September 14, 2010 at 9:33 AM | PERMALINK

So Lieberman is D ?

If not why is he the first example of D's breaking ranks ? Steve, been doing overtime at Fox ?

Posted by: ScottW714 on September 14, 2010 at 9:43 AM | PERMALINK

If the Republicans gain back the Senate--or if it is 51 to 49 for the Dems--will Lieberman and Nelson switch parties (officially) in exchange for committee chairmanship positions?

Posted by: Kevin Mulcahy on September 14, 2010 at 9:50 AM | PERMALINK

From the office of Senator Evan Bayh:

My position on this issue is consistent with that of Senators Lieberman and Nelson. No f*cking way I'm going to vote to raise my taxes!!!

Posted by: Evan (I'm glad he is going) Bayh on September 14, 2010 at 9:52 AM | PERMALINK

Nelson and Lieberman dominate the message because the White House and Dem leaders do hot have an upfront strong message. They just cower and equivocate.

I have written my last check to any Democratic Party committee if they do not get their act togther on this vital issue. They can get checks from the millionaires whose taxes they are about to cut.

Posted by: Theda Skocpol on September 14, 2010 at 9:58 AM | PERMALINK

If deficits really do matter to these asshats, then the tax cuts should NOT be extended for anyone.

It will be interesting to see if there are enough 'progressive democrats' to filibuster extending tax cuts for the wealthy. If the tax cuts for the wealthy are extended, it will just be more ammunition for the rethugnican efforts to dismantle social security, medicare, and medicaid in the name of 'deficit reduction'.

In my opinion, it would be highly preferable to see all tax rates go back to what they were when Billy Bob Clinton left office than to provide further tax cuts to the wealthy.

Posted by: SadOldVet on September 14, 2010 at 9:59 AM | PERMALINK

Steve, I know you think the middle class will spend their 2011 tax cuts and stimulate the economy, but when you point out that the tax cuts for the rich cost us $700 Billion in lost revenue you might at least acknowledge that the tax cuts for the middle class are going to cost $3,000 Billion (yes, THREE TRILLION DOLLARS) in lost revenue over the same ten years.

Or, what SadOldVet said.

Posted by: Lance on September 14, 2010 at 10:10 AM | PERMALINK

The Democrats have to really work to screw this up. No bill--all the tax cuts expire. Not a perfect result, but not the end of the world and the really well to do will pay a lot more in taxes. Vote for Obama plan and everyone gets a tax cut including those earning over $250K on their first $250K. The only way the Dems can blow this is if more than 8 Democratic Senators side with a GOP bill to give the very well to do an even bigger tax cut than they will get if Dumbya's tax cuts are extended for those making less than $250K year. In essence Nelson can cut off his nose to spite his face and increase the taxes on the privilged few and the Democrats still win

Posted by: Terry on September 14, 2010 at 10:14 AM | PERMALINK

and another thirty pieces of silver for Nebraska.

Posted by: Jamie on September 14, 2010 at 10:14 AM | PERMALINK

I'm starting to believe that the best thing to do is have both parties scream at each other, have nothing pass and let the rates rise for everyone, as designed by Bush and the GOP Congress. There is no need to do anything. The worst case scenario (doing nothing) actually solves the budget deficit problem in one fell swoop.

Posted by: danimal on September 14, 2010 at 10:19 AM | PERMALINK

Let all the tax cuts expire. I don't recall suddenly becoming richer at any point in the Bush administration. I recall the economy heading dowsn the drain, however.

Before the taxes were cut, I DO recall that the economy was quite robust and my family, friends and neighbors were not scared shitless of losing their jobs, savings and homes.

Which economy would you rather live in?

Let the tax cuts expire.

Posted by: jcricket on September 14, 2010 at 10:23 AM | PERMALINK

The best part about a filibuster is that you can have repeated cloture votes before the election. It also is a great chance to illustrate how the minority has been blocking popular legislation.

Insist on two bills. Those who want to vote for tax cuts for the wealthy should be allowed to do so, especially after having voted against tax cuts for the middle class.

Posted by: david1234 on September 14, 2010 at 10:40 AM | PERMALINK

The high end incomes get tax cuts up to the $200,000/$250,000 mark...why should they get so much more? That is how the argument should go. Most of the population can't fathom that much income anyway. The Dems should not cave on this!

Posted by: maggie on September 14, 2010 at 11:56 AM | PERMALINK

How the fuck can the smart people who read this blog read this item and come away blaming _Obama_? What the fuck is the matter with you? Obama doesn't support what these assclowns are doing. They're off on their own raising havoc like they always do. "The Democrats" do stupid shit BECAUSE PEOPLE LIKE NELSON AND LIEBERMAN DO STUPID SHIT. How do you make them stop? You can't. You fucking can't. Put the goddamn blame where it belongs. Christ.

Posted by: FlipYrWhig on September 14, 2010 at 1:31 PM | PERMALINK

I blame Obama for a lot, but he has asserted the correct position on letting Dumbya's tax cuts expire. Now if he also said he would veto any bill that extends the tax cuts for those making more than $250K, I could actually cheer him. By not doing that he gives hope to the GOP deadenders and their democratic cronies.

Posted by: Terry on September 14, 2010 at 3:02 PM | PERMALINK
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